How can it be that Merrill Lynch, Citigroup, Morgan Stanley, Bear Stearns, UBS and other big banks have been turning to foreign governments for financial lifelines with so little public controversy? Perhaps it is because the dangerous broader context of what is happening – the rise of “state capitalism” – is not sufficiently recognised. Indeed, the reality may be that the era of free markets unleashed by Margaret Thatcher and reinforced by Ronald Reagan in the 1980s is fading away. In place of deregulation and privatisation are government efforts to reassert control over their economies and to use this to enhance their global influence. It is an ill wind that blows.

Exhibit A is a quantum increase of regulation nationally and globally. The issues of product and food safety will spawn new and highly complex trade regulations in the US, the European Union, China and the World Trade Organisation. The blizzard of energy and environmental legislation in a number of countries is mind-boggling. The subprime debacle will probably lead to new rules for every type of institution that securitises debt.